Children play games at the Nickel! Nickel! amusement center in Whittier. Owner Don Havard said the center will be closing soon in the face of reduced revenues and changing video game technology. (Whittier Daily News/Staff Photo by Keith Durflinger)

Redemption games, which reward players with tickets that can be redeemed for prizes, and interactive physical kinds of games are faring the best these days at amusement centers, industry experts say. (Whittier Daily News/Staff Photo by Keith Durflinger)

There was a time when games like Space Invaders and Mortal Kombat were enough to lure kids into video arcades and amusement centers.

Seduced by the burgeoning technology, players flocked to the centers with their friends and often spent hours hanging out and trying to beat their latest scores.

But the growing sophistication of home-based video games has cut heavily into that market, particularly since home systems moved from 2-D to 3-D graphics.

In recent years, scores of arcades have gone out of business as consumers have turned instead to games they can access on their smartphones, tablets and laptops.

Attendance at the amusement centers that are left has been further impacted by the recession and by the nation’s painfully slow recovery.

The economic downturn has left many consumers with far less money in their pockets.

“The recession started at the end of 2007, and in 2008 it hit us,” said Don Havard, owner of Nickel! Nickel!, a Whittier amusement center that offers a variety of arcade games and entertainment for a $2 admission charge. “Attendance revenues were off by a third. It steadily grew back, but average spending in the summer is still off by 25 percent. People just don’t have as much money to spend.”

Nickel! Nickel! is winding down and will likely close soon, according to Havard, who bought the business back in 2005.

“We were able to modify our lease, and in return for that, the property owner has been marketing it for a new tenant,” he said. “He hasn’t found anyone yet, but there have been some good prospects.”

Havard agreed that the industry has undergone big changes.

“When we got into the business, it was mostly a typical arcade, but we knew it needed to change,” he said. “It was 75 percent video games and 25 percent redemption games. We moved that to 50/50, but if we were going to be here longer, we would change that to 80 percent redemption games and 20 percent video games.”

Debra Wong, a senior manager at Nickel! Nickel!, said today’s customers are surrounded by video game technology before they even walk in the door.

“We have kids coming into the arcade who are already playing games on their smartphones,” she said. “So I’m thinking, ‘Why are you even coming here?’ ”

Another Nickle! Nickel! in Upland also closed about a year and a half ago. That store is now a Big 5 Sporting Goods.

Quing Nguyen, who manages the Nickel! Nickel! in Huntington Beach, said attendance there has also dipped over the past couple of years, although it’s risen considerably from the slump they weathered five years ago.

“We do pretty well because we’re very affordable,” he said. “And places like Dave & Buster’s and Chuck E. Cheese do well because they constantly improve their technology — and they have food. That’s what attracts people, and while they’re there, they will play.”

Mountasia Fun Center in Santa Clarita is surviving by offering more physical, interactive kinds of games like laser tag, go karts, batting cages, bumper boats and a rock climbing wall.

Monster Drop Extreme is a prime example. When a player swipes his card, a ball drops from 20 feet up onto a rotating carousel with several holes. If the ball falls into a hole marked “10,” for example, the player receives 10 tickets. But if it lands in a hole marked “1” the player only gets one ticket. The tickets can then be redeemed for prizes.

“We’ve turned away from the older type video games to more carnival games,” Henn said. “They are games that rely on some physical movement.”

Henn said business at Mountasia still falls about 30 percent when schools are in session. And it can drop another 20 percent when the weather gets cold.

“We’ve had several bad months, but the summer did OK,” he said. “We send out email blasts and coupons. Families are looking to save money, but it’s still hit or miss with the coupons.”

Henn said Mountasia tries to target families with unlimited play cards, which can be purchased for about $20. Those allow visitors unlimited access to many of the center’s attractions, although that doesn’t include redemption ticket games.

Boomers Upland, which has everything from bumper boats and kiddie rides to video games and miniature golf, also saw business slump during the recession.

“We felt the same lull everyone else did in 2008 and 2009, but in 2012 people started coming back out to the parks,” said Michele Wischmeyer, vice president of marketing for Palace Entertainment, the holding company for 40 amusement parks, including Boomers Upland.

Wischmeyer said gaming is still a big part of Boomers’ business, although the concept has been tweaked — and in some cases enlarged.

“The manufacturers have revisited some of their games, and now they are taking classic games like Connect Four and putting an interactive spin on it,” she said. “The Connect Four we have now is 8 to 10 feet tall with lights and a joystick that allows you to decide where the pieces are going to go. We’ve seen a kind of re-invention of video games.”

Boomers also just added a water attraction with five water slides, one of which is 35 feet high, according to Wischmeyer.

Tony Jones, marketing manager for Mesa, Ariz.-based Golfland Entertainment Centers Inc., said his company has also tweaked its business model in the face of increasingly sophisticated video games.

“Some of our new games are based on mobile phone apps,” he said. “One of the most popular ones is Fruit Ninja. But a lot of the new video games aren’t as popular anymore because you can get them on game consoles.”

Golfland operates seven centers, including one in Mesa, Ariz., five in Northern California and one in Anaheim.

“These kinds of centers will survive as long as they adapt,” he said. “Many of our most popular games now are imports from China and Japan. But as far as the old street-fighting games … they’re dead because they’re too easy to replicate at home.”

Those may be easy to copy. But try re-creating a 19-story-high roller coaster at home — a coaster than can hit speeds of up to 70 mph.

Ian Corydon, an equity analyst with B. Riley & Co, said large theme parks like Six Flags Magic Mountain in Valencia and Disneyland in Anaheim still have a corner on that niche market.

“What Six Flags has to offer is very unique,” he said. “They have roller coasters that cost many millions of dollars to make. But they still need to have something new at their parks each year to get people to come back. And they need to aggressively promote those places locally because the bulk of their customers come from a 100-mile radius around the park.”

Kevin Smith handles business news and editing for the Southern California News Group, which includes 11 newspapers, websites and social media channels. He covers everything from employment, technology and housing to retail, corporate mergers and business-based apps. Kevin often writes stories that highlight the local impact of trends occurring nationwide. And the focus is always to shed light on why those issues matter to readers in Southern California.

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